Nghe An seeks solutions to improve PCI to better serve investors

Reasons for PCI decline

Index, methodologyPCI measures the business environment and economic governance quality of provincial governments.Established by VCCI in 2005, adjusted in 2009, 2013, 2017 and 2021. For a long time, identifying PCI as an important criterion in assessing capacity and business environment, Nghe An has always focused on solutions to support people and businesses, focusing on reforming administrative procedures (TTHC), creating convenience and openness for businesses to implement investment projects.

Provincial leaders inspect production and business in Anh Son. Photo: Pham Bang

In 2019, Nghe An's PCI led the North Central region, ranking 18th nationwide, up 1 place compared to 2018. This is the province's highest position ever, showing progress in administrative reform and investment attraction. By 2021, Nghe An's PCI ranked 30th, down 12 places, in which the transparency and fair competition indexes were still low.

At the scientific workshop "Factors affecting investment attraction of enterprises in Nghe An province" organized by Ho Chi Minh National Academy of Politics in collaboration with Nghe An Provincial Party Committee, based on the results of PCI announcement, Dr. Dau Huong Nam - Deputy Director of the Center for International Knowledge Sharing, Ho Chi Minh National Academy of Politics said that there is still a lack of consistency between policies, will and implementation; consistency in policies from year to year, policy changes have not created peace of mind for enterprises; consistency between superiors and subordinates, labor quality... The above valid opinion is also the assessment of many enterprises on the business environment in Nghe An.

Analyzing the component indicators of PCI in 2021, although it still includes 10 component indicators, in fact, more indicators have been added. Specifically, there are 142 indicators belonging to 10 component indicators with a total score of 100. Notably, out of 10 component indicators, 3 indicators aretransparent business environmentand public business information, business support policies and good labor training policies account for 60 weighted points; other indicators, except for inspection time, examination and implementation of regulations, quick administrative procedures are 10 points, the rest are maintained with only 5 points each.

Workshop on criteria for assessing provincial competitiveness in Nghe An organized by the Department of Science and Technology, NAPC and VCCI in 2021. Photo: Nguyen Hai

The above assessment method shows that the PCI assessment index has changed, basically assessing the direct results of the management activities of provincial leaders such as issuing policies and procedures instead of indicators showing the business investment environment as an indirect result of management behavior. In other words, the PCI index in 202 tends to assess the results of the causal relationship of the management activities of provincial government leaders instead of assessing the general results brought about by many stakeholders.

In fact, the three areas in which the top 10 provinces are all high include labor training index, time cost, business support policy; provincial government's attitude towards the private sector, business registration time, and procedures.procedures to get rent reduction...

For the above new indicators, targets and variables, Nghe An is lower than the average of other countries and far from the group of leading provinces, so the drop in ranking is understandable.

Citizens come to apply for a new driver's license at the Provincial Public Administration Service Center. Photo: Nguyen Hai

Mr. Tran Quoc Thanh - Director of the Department of Science and Technology shared: With a result of 64.74 points, in 2021, Nghe An's PCI still increased but dropped 12 places because other provinces were taking drastic measures, while the solutions implemented in Nghe An were not strong enough.

Selecting indicators to create breakthroughs?

In recent times, Nghe An has issued preferential policies and investment support; directed the review, monitoring and urging of project progress; assigned provincial leaders to monitor and direct key projects; expanded planning,Land lease policy innovation in Southeast Economic Zone,Cua Lo Portreopen international container routes, support and closely monitor large projects in industrial parks, promote investment attraction policies, vocational training policies, issue decisions to implement the Government's Resolution on improving the business environment...

The Provincial People's Committee holds meetings every two months.Association meeting, business association, entrepreneursto listen to business opinions, to share, to resolve difficulties, to contribute to creating high consensus...

VSIP Nghe An Industrial Park Phase 1 has invested in synchronous infrastructure. Photo: NH

After the PCI 2021 was announced, in the spirit of openness, the Provincial People's Committee also assigned the Nghe An Investment, Trade and Tourism Promotion Center (NAPC) to work with VCCI. Based on the research and acceptance of expert opinions, the province will have solutions to create breakthroughs and improve PCI in accordance with the new situation.

According to NAPC leaders, the low PCI in 2021 has both objective and subjective reasons. Objectively, the PCI assessment methodology has changed. In fact, Nghe An has a number of new indicators that are highly appreciated and have strengths such as online administrative procedures always achieving high rankings, increasing 5 places on the rankings.

VSIP Nghe An Industrial Park Phase 1 has invested in synchronous infrastructure. Photo: NH

However, Nghe An still has many shortcomings and limitations related to component indicators such as land access and stability in land use, informal costs, fair competition index, dynamism and pioneering of the government... which have been pointed out for a long time but have been slow to improve and are underrated. Several cases involving officials in departments and branches being arrested, the situation of "petty corruption"... have also reduced the confidence of many businesses.

Mr. Phan Thanh Mien - Chairman of the Provincial Association of Small and Medium Enterprises frankly expressed: “Private enterprises and small and medium enterprises are the main components that take PCI assessment votes. In recent years, although the province is determined to reform administrative procedures, somewhere in the departments and districts, they have not really accompanied businesses; the way to guide and handle investment and land access administrative procedures is still cumbersome, so it is very difficult to satisfy investors and businesses”.

From the actual research, NAPC representative shared: In the coming time, besides improving the business environment to be better and more substantial, the province needs to choose a few high-scoring component indicators and Nghe An has strengths to handle in order to create a breakthrough, specifically good business support policies and labor training policies;land access policy, reduce rental prices in industrial parks/clusters.

Nghe An has a system of vocational training schools and abundant labor resources that are among the top in the country, but businesses, especially FDI enterprises, are still quite concerned about attracting and using the number of workers.workers stay in their hometown to work, especially skilled workers.

Workers learn about job positions at the Labor Supply and Demand Connection Fair organized by the Southeast Economic Zone Management Board and VSIP. Photo: Nguyen Hai

On the other hand, along with issuing the Project to support business and entrepreneur development until 2025, the province has also just approved the ProcessAssessing the competitiveness index of departments and districts(DCCI).

Since 2020, the province has issued a policy to support start-up innovation and support businesses in digital transformation. Currently, after conducting the DCCI assessment in 2021, there are still different opinions among departments and branches, so the province has not announced the official results. To change and create a breakthrough, it is thought that the province needs to research and soon publicize this assessment index.

Nghe An Provincial People's Committee held a meeting and dialogue with enterprises importing and exporting container goods through seaports. Photo: Nguyen Hai

In summary, along with a number of measures to rectify and improve public service ethics, Nghe An is determined to create a breakthrough in improving PCI, taking drastic actions to create real changes with high socio-economic results.